I'm a fan of SendGrid, the transactional email service provider. I use them, and I know they're a popular choice with other startups.
But I just saw the news that Amazon was releasing the Simple Email Service. This will compete directly with Sendgrid. From what I can tell their products are pretty much identical, with maybe some slight differences in how you implement.
Amazon is obviously a popular choice with devs. Amazon Web Services powers many of the web apps we use everyday. So its not going to be an uphill battle for them to attract customers.
Furthermore, the Amazon Simple Email Service includes a free plan for EC2 users which offers 2000 emails a day. For many apps, that will be more than enough. Free can be tough to beat
This is a problem for all service providers and platforms. You're always at risk of having the big boys copy your product or release something similar.
Is Sendgrid dead? No, of course not. I'm not jumping over to Amazon and either will the other Sendgrid customers. But it will be interesting as an observer to see how the small guys (Sendgrid) innovate (if possible) over the coming months. We're in for a good lesson in competition and product development. Stay tuned.
My question to the startup community - how do you deal with this type of competition? Tweet me up with your thoughts.
By the way: If you would like to try out Sendgrid, new customers get a 25% discount using this special link.